India's mobile phone manufacturing has grown rapidly under PLI, yet domestic value addition remains shallow. Critically examine how the Mobile Phone Manufacturing Scheme (MPMS) seeks to address this gap.

India is today the world's second-largest mobile phone manufacturer, with exports rising 127-fold from ₹1,500 crore (2014-15) to ₹2 lakh crore (2024-25) [2]. Yet domestic value addition in electronics stands at only 18-20% [3]. The MPMS attempts to convert assembly-led scale into genuine value creation.

The persisting value-addition gap

• Growth has been assembly-led: high-value chipsets, displays and camera modules are largely imported, leaving India at the low-margin end of the value chain [3].
• The earlier PLI rewarded incremental sales, not backward integration — volumes grew faster than depth.

How MPMS seeks to close it

• Outlay of ₹62,500 crore over FY 2026-27 to FY 2030-31, with differentiated incentives of 2.25%-5% on eligible sales [1].
• Crucially, an additional incentive of up to 1.5% is linked to domestic sourcing of key components and sub-assemblies — tying public money directly to value addition rather than output alone [1].
• Stated objectives extend to Indian brands, patents, design and R&D, signalling a shift toward technological sovereignty [1].
• It works alongside the Electronics Components Manufacturing Scheme (₹22,919 crore, notified April 2025), which builds the supplier base in PCBs, connectors and camera modules that MPMS then rewards firms for buying [4].
• Being outcome-linked, disbursal follows realised production — projected at ~₹39 lakh crore and ~60,000 direct jobs [1].

Limitations

• A 1.5% top-up may be too thin to offset the cost disability against established Chinese and Vietnamese component clusters.
• Semiconductors and displays lie outside its scope; DVA will remain capped until fabrication capacity matures.
• Sales-linked design still favours volume and large incumbents, with limited MSME entry.
• Benefits remain exposed to global demand cycles and tariff shifts.

MPMS is therefore a credible course correction — moving incentives from how much is assembled to how much is made here. Its success will depend on synchronising it with component and semiconductor capacity, and on periodically recalibrating the sourcing-linked slab upward, so that Make in India matures into design in India.